Top 10 tips for being a successful retail franchisee

Karli Furmage, CEO, Franchise Relationships Institute

This article appears in the July/August 2013 issue of Business Franchise Australia & New Zealand

The Franchisee Success Study we conducted at Franchise Relationships Institute (FRI), found that franchisees working longer hours performed significantly worse in terms of financial achievement, customer satisfaction and their active participation in  the franchise network. And they experienced higher levels of burnout.

Our research suggests that on average, franchisees in the retail sector are working longer hours than their mobile or business-to-business counterparts, and are less satisfied with their work. This was particularly the case for franchisees in retail food.  We work with a lot of retail clients across many industries. In our privileged position as advisors, we see what works and drives success in retailing.

Our mission as a business is to help drive excellence in the franchising sector. So here are our top ten tips from 24 years in business, working with hundreds of clients around the world.



1 Love Thy Brand

Our research indicates that your belief and sense of pride in your brand is the single biggest predictor of your success. Franchisees with higher levels of brand passion had higher financial performance, participated more in the franchise network and provided a better customer experience.

Ask yourself these questions to test your brand passion:

• Are you proud to tell people you belong to the brand?
• Does your brand feel like a perfect fit for you?
• Do you believe in what your brand stands for?

2 Lead The Way

Remember your attitude will influence the beliefs and behaviours of the staff you are leading. Not only do you set the goals and direction for your business, but you have the starring role in setting the culture.

Culture comes from the top and it is ‘caught, not taught’. This means the extent of your belief in and passion for the brand will be picked up and reflected by your team. This in turn will be perceived by your customers, usually without them even realising it.

There is a significant link between the extent to which you are comfortable leading and motivating others (your leadership potential) and your business performance. In particular, franchisees with high leadership potential were found to have  significantly better sales and profitability . Leadership is like any other skill, it can be improved with knowledge and practice.

• Do you enjoy being in charge of a group?
• Are you good at influencing others?
• Do you model the behaviour you want in your business?


3 Set Your Team Up For Success

The people you hire are your representatives – the face of your business. Think about who you need in order to achieve your goals and deliver excellence, and hire accordingly. One fact of retail is you will more than likely need to hire young people. Be clear on what you are recruiting for, provide structured training and reward good performance.

Once you have the right team in place, look after them. If they are engaged and interested they will be motivated to perform at a higher level. If they feel you care about them, they will be more likely to care about you and about the business.

• Do you have the right people in your business?

• Do they have the tools and training they need to succeed?

4 Empower Your Team with Information

Teach your team how to drive sales by turning your targets into relevant, practical goals. For example, a target of making $1000 might equate to ‘sell five extra coffees each hour’. Breaking your targets into small, achievable sales is far more motivating for your team, as well as being easier to understand and remember. Make sure your team understand what it costs to sell one of your products or services. Once they understand all the costs that go into one product (rent, electricity,  phone, wages), they’ll start to get a greater understanding of what it costs to run a business. This should impact positively on their care and productivity levels.

• Do you communicate your sales goals in an easy to understand way?

• Do your team understand the fundamentals of running a business?


5 Your Store is Your Temple

Don’t underestimate the power of the basic rules of retailing. Spend twenty minutes each morning ensuring your store is neat and clean, well stocked with pricing visible, good lighting, and appropriate music. One simple and effective way to know  your customers, is to spend time talking to your customers and asking them what they like about your store, as well as suggestions for improvement. People are usually very willing to give genuine feedback if you show interest in their opinion.

• Do you ask for feedback and action good ideas?

• Do you review your store through the eyes of your customer?

6 Prioritise the Customer Experience

You may have the best team and the best looking store, but the real measure of retailing success is what happens when the customer steps through your doors.

Customers buy the messenger before they buy the message, and staff presentation is an integral part of this. For example, the appearance of staff in dirty uniforms might say ‘I can’t even dress myself, what do you think I did to your food?’ Just  because you have a counter doesn’t mean you have to stand behind it! In business there is always some kind of counter; it can be a big wooden bench, a small clipboard, or even a metaphorical counter in the form of a mindset. Get rid of the things  that stand between you and your customers. Make connections on a real, person-to-person level.

• Do you operate from the framework of meeting a need for a person, rather than selling a product to a customer?

• What ‘counters’ do you have in your store and how do you remove them?

7 Build Your Supporters

We define supporters as people who willingly invest time energy and resources in your business. Building the commitment of the people on whom your business depends is critical. Your staff, landlords, customers and suppliers, all play a critical part  in your success. Building relationships with other local businesses, sharing your goals with your centre manager, asking your customers their opinion, give your supporters the opportunity to contribute to your business. Your franchisor is a critical supporter and knowing how to communicate best with them; this [through an operations/ field person assigned to you, or in some systems directly with each department], ensures you can work constructively together and support each other for mutual benefit.

• How do you build the support of the people on whom your business depends?

8 Maintain Family and Social Support

Running a small business can be tough and often lonely work. Our research found family and social support is the second highest indicator of franchisee success. Having people in your corner who want you to succeed is critical. Share your goals with those around you, let your family and close friends know what you want to do, ask for help.

• Do you share your goals with your family and friends?

9 Master What Matters

Retail can be a complicated business, managing stock, labour, fixed costs, training people, serving customers …there is a lot to manage. The things you need to manage closely when you first open, as opposed to three years into running your business can be very different. Manage with accurate data and set a process to continually improve. Allocate time each week to spend on your business, communicate this clearly with your team so they know you are unavailable to work in the business or with them during this time. Be strict to keep to this and form a habit of regularly focusing on your business.

• Do you know the critical KPI’s you need to manage at each stage in your business journey?

10 Take Action

Do stuff! It is that simple. You can’t expect to be successful if you wait around for someone to give you all the answers.


Successful retail franchisees in our experience, don’t wait for a silver bullet.

No set of tips that once read will change your fate. You have to be on the lookout for information and apply it to your business. Some things will work and some won’t. The only people who have ever truly failed are those who at some point gave up.  How about taking 10 minutes now to reflect on this list and choose something you can action to be a great retailer.

The Franchise Relationships Institute was established 24 years ago to help equip franchisees and franchisors with the knowledge and skills to be successful at the business and personal levels. Our team of psychologists and franchise practitioners are  regularly out there looking for ideas, evidence based research and practical strategies to make a difference. We hope you’ve found this article helpful. Contact us at: